Oil and shipping squeeze

Oil buyers are paying crisis prices for prompt cargoes as the Strait of Hormuz disruption collides with a second bottleneck at the Panama Canal. (eia.gov) The United States Energy Information Administration said on April 7 that crude and fuel prices jumped sharply after military action in the Middle East on February 28 and the “de facto closure” of Hormuz. Reuters reported on April 7 that some European and Asian refiners were paying near $150 a barrel for physical crude, far above futures prices. (eia.gov) (usnews.com) Hormuz is the main export route for oil from Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Iraq, Bahrain and Iran. The International Energy Agency says a prolonged disruption there can also strand most of the world’s spare oil production capacity, much of it in Saudi Arabia. (iea.org) The United States Energy Information Administration said about 20 million barrels a day moved through Hormuz in 2024, equal to roughly one-fifth of global petroleum liquids consumption and more than one-quarter of seaborne oil trade. It also said about one-fifth of global liquefied natural gas trade passed through the strait, mainly from Qatar. (eia.gov) The Panama Canal is a different problem: it is a freshwater lock system, so low lake levels limit how many ships can be lifted through it each day. The United Nations Conference on Trade and Development said drought forced the canal authority to cut vessel crossings, adding to wider shipping disruptions already hitting the Red Sea and Black Sea. (unctad.org) Panama Canal Authority administrator Ricaurte Vásquez Morales said in September 2025 that the canal would average about 33 daily transits in 2026, below its 36-transit capacity. S&P Global said that forecast meant traffic would remain below pre-drought levels even after water conditions improved. (spglobal.com) The canal’s reservation system turns delay into a direct cash cost. The Panama Canal Authority says booked slots are managed through its Transit Reservation System, and a 2024 rule change set a minimum bid of $100,000 for a special auction of an unallocated conditioned slot. (pancanal.com) (gac.com) That means energy traders and shipowners are facing two separate clocks at once: one on crude availability and one on vessel timing. When prompt oil barrels become scarce and canal windows stay tight, refiners, tanker operators and importers all pay more to keep cargo moving. (eia.gov) (pancanal.com) There are signs of partial movement at Hormuz, with Reuters reporting on April 11 that three fully laden supertankers exited the Gulf as United States-Iran talks began. But the pricing shock in physical crude and the canal’s still-limited throughput show how quickly a regional disruption can spread through fuel markets and global shipping schedules. (msn.com)